This week is World Wellbeing Week, an event that aims to promote individual wellbeing across all aspects of life. Therefore we are asking:
Is the cost of living crisis affecting your mental health?
The last 12 months have seen the pressures people are feeling because of the cost-of-living crisis increase significantly and it is important to assess how these manifest in stress and anxiety. There is an almost symbiotic relationship between money worries and mental health issues. It can be difficult to determine which comes first. We probably all accept that financial issues cause stress and anxiety but what might not be so easy to see is how poor mental health affects financial decisions resulting in a cycle of worry and increasing stress.
Mental health issues can impact our motivation to manage finances and in some people it may show itself in ‘avoidance’ – not opening bills, not checking bank accounts, not keeping on top of money matters; basically hoping that ignoring the problem will make it go away. It can also cause us to make poor financial decisions; perhaps borrowing money at excessive interest rates just to ease the strain, spending (or overspending) just to feel better in the short-term.
So if there is an adverse relationship between financial pressure and mental health, it stands to reason that the opposite is true. Although we all know that money can’t buy happiness, improved financial wellbeing will help to enhance mental wellbeing. This being the case, what can employers do to support employee financial wellbeing and thereby improve their mental health?
It's good to talk (or at least listen!)
British people are notoriously reluctant to talk about money. Lloyds Bank commissioned research suggests that money is a bigger taboo subject than sex, religion or politics. Workplace financial education is one way in which employers can help to reduce this taboo and thereby encourage employees who need help to seek support.
Workplace financial education can provide a safe environment for employees to improve their understanding of fundamental financial concepts; budgeting, debt and borrowing, mortgages, savings and investment. By enhancing their money management skills, employees will gain confidence in their financial decision making. Better decision making in turn should lead to improved financial outcomes.
When compared to other wellbeing initiatives, financial education is:
- relatively low-cost to the employer
- inclusive, all employees no matter what their pay-grade can benefit
- valued by employees, who can often obtain immediate benefits from it
- a significant aid to employee wellbeing and in turn, workplace productivity
Workplace financial education is not a silver-bullet – it will not immediately clear all of the employee’s financial issues. But what it will do, is provide them with knowledge and skills so that even by making only one change to their current financial practices, they can take an element of control over their money. This small change then paves the way to improved financial wellbeing and in turn has a significant impact on mental health.
Adrian Firth, Head of Financial Wellbeing at Mattioli Woods says, “It doesn’t matter how much money you earn, if you don’t have control over your finances then it’s easy to create financial issues. Many employees simply move from month to month without having a plan in place. Financial education helps teach the basics of good money management skills, alleviating possible future problems, anxieties and stress.”.